Media Images

Downloadable Images of
NCPA Experts

What Happens When Court Rulings Conflict on Obamacare Subsidies

by Angela Gonzales

July 24, 2014

Source: Phoenix Business Journal

Mass confusion was created today when two separate appellate courts issued conflicting decisions on health premium subsidies for consumers purchasing coverage on federally run insurance exchanges, such as the one in Arizona.

The 4th Circuit Court of Appeals ruled that the Affordable Care Act allows subsidies in the 36 states where exchanges are operated by the feds. But the Court of Appeals for the District of Columbia Circuit said no way, they aren't eligible for subsidies.

So which ruling will stand?

"No one really knows what it means, if you want to know the truth," said Devon Herrick, senior fellow with the National Center for Policy Analysis in Dallas.

He said it most likely will get pushed up to the U.S. Supreme Court for a final ruling.

"A decision in one (circuit court) is not binding on other federal courts outside their jurisdiction," he said.

This is all because the law's language is ambiguous, said attorney John Balitis, director of Fennemore Craig PC in Phoenix.

"Ambiguity in key language in the act from the beginning set up a debate about whether these critical credits were available in connection with all exchanges, or only those exchanges sponsored by state governments," Balitis said. "Today's conflicting rulings between appellate courts on this issue brings us one step closer to an answer, which ultimately may require Supreme Court intervention. We here stand to be impacted, because Arizona deferred to the federal government for purposes of our exchange system."

This year, 85 percent of those who enrolled in exchanges received subsidies, according to the U.S. Department of Health and Human Services.

The Supreme Court will have the final say, said Henry GrosJean, owner of GrosJean & Associates Inc. in Glendale.

"The only other thing that concerns me is if they can change the ACA at their discretion, what would bar them from making discretionary changes to other laws that might be designed to allow us certain freedoms or protections?" he said.

"We will be closely following the appeals processes for these rulings," said Anjanette Coplin, spokeswoman for Aetna Inc. "It’s important to note that, for exchange members, there is no immediate impact and they don’t need to take any action."

Chris Hogan, president of Benefit Commerce Group in Scottsdale, said he also expects the issue to be pushed up to the Supreme Court.

"It also is very unlikely that there will be any impact on the annual open enrollment for 2015 that begins Nov. 15," he said. "At this stage, we are telling our clients that this is just one step in a process that will eventually lead to this issue being resolved, but it’s just like asking about the outcome of a game after the first quarter – there’s a lot left to go."